Commodity Futures

Commodity Futures Contract

An agreement to buy and sell a commodity at a certain date at a certain price. For example, Investor A may make a contract with Farmer B in which A agrees to buy a certain number of bushels of B's corn at $15 per bushel. This contract must be honored whether the price of corn goes to $1 or $100 per bushel. Commodity futures contracts can help reduce volatility in the normally volatile commodity markets, but contain the risks inherent to all speculative investing. These contracts may be sold on the secondary market, but the person holding the contract at its end must take delivery of the underlying. See also: Carrying charge, Options contract.

Commodity Futures

Contracts to buy or sell a fixed amount of a commodity (wheat or soy beans, for example) for a fixed price at a future date.

These products are now listed on the ICE trading platform, which is also home to the ICE Futures US soft commodity futures and options that include Sugar 11, Cocoa, Coffee, Cotton and Frozen Concentrated Orange Juice contracts.

In particular, the synchronized boom and bust cycle in 2007-8 in a large number of commodities across the energy, metal, and agricultural sectors has led to a heated debate regarding whether speculation in commodity futures markets caused a bubble in commodity prices.

So, the article has an aim of providing knowledge through facts and figures to the investors about the Indian Commodity futures market as an investment option and its inclusion in the traditional asset portfolio.

The Tokyo Commodity Exchange is planning to take over the farm market operations of the Tokyo Grain Exchange as proposed by the Japan Commodity Futures Industry Association, the presidents of the two exchanges said at separate press conferences Tuesday.

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